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Beyond the World news headlines

German ‘cash for clunkers’ out of gas just before vote

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  Germany‘s “cash-for-clunkers” scheme expired on Wednesday with a last-minute surge in demand a full three weeks before the Sept. 27 election and much faster than anyone thought possible.   The government’s 5-billion euro incentive programme has led to the purchase of 2 million new cars in the last eight months, according to the website of the Federal Office of Economics and Export Control  that has been keeping a live update of how much money was still available. New car registrations are up about 30 percent this year — in the middle of the country’s worst post-war recession.   By any measure the “Abrwackpraemie” (car junking bonus), as the Germans informally referred to the government’s more official “Unweltpraemie” (environment bonus), that offered new car buyers 2,500 euros for scrapping their older vehicles has been a great success story — a textbook example of pump priming that would make have made Franklin D. Roosevelt proud.    

 

It was among the 81-billion euro basket of stimulus measures the government put together to soften the impact of the recession and was later copied in many other countries, including the United States.It started out as a 1.5-billion euro scheme but that had to be quickly topped up in the spring as a frenzy swept the country. It gave the economy an important glimmer of hope as gross domestic product contracted by a post-war record 3.5 percent in the first quarter. The government’s heavy-handed intervention did, however, disrupt the free markets — hitting the market for used cars and causing problems for retailers as we pointed out in this story in April.  

My colleague Paul Carrel pointed out in an analysis today that the “cash-for-clunkers” scheme helped private consumption in Europe’s biggest economy grow by 0.1 percent in the first half and without the scheme it would have declined 1.0 pecent compared to the first half of 2008.    

 

The Social Democrats led by Vice Chancellor Frank-Walter Steinmeier — pictured here on the left inspecting a new car as it rolls along on the assembly line — have claimed credit for the Abwrackpraemie, saying it was their idea that helped the car industry in Germany and elsewhere with the generous subsidies for new cars for those to junk their older vehicles. That may be the case but voters don’t seem to care: the SPD still trails Chancellor Angela Merkel’s conservatives by about 12 points in opinion polls. 

The pressing question now is: What will happen to the car market now? Will demand for cars collapse? Did the “cash-for-clunkers” scheme simply encourage would-be car buyers to pull forward their purchases? Will the market be sucked dry? Or did it help stimulate genuinely new demand from people who otherwise would have held onto their ageing vehicles? Will it prove to be a “Strohfeuer“, a flash in the pan?

German state elections: Live

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10 p.m. - So it’s a black eye for Merkel and her conservative party four weeks before the federal election with the likely loss of power in two of three states that went to the polls on Sunday. But will it make a difference for the federal election on Sept. 27? Will Steinmeier’s SPD, now in the driver’s seat to win state offices from the CDU for the first time since 2001, be able to take advantage of the momentum? Will the CDU start to get nervous again after squandering big leads in last month of the 2002 and 2005 federal elections? September could be an exciting month in Germany.

 

9:50 p.m.  Bild newspaper’s Nikolaus Blome writes in a column for Monday’s early editions: “It was an earthquake kicking off the hot phase of the national campaign…The CDU has been spoiled by its past success but now has it in writing that the Sept. 27 election is far from decided.”

from The Great Debate UK:

Ghosts of Germany’s communist past return for election

kirschbaum_e- Erik Kirschbaum is a Reuters correspondent in Berlin. -

Will the party that traces its roots to Communist East Germany's SED party that built the Berlin Wall soon be in power in a west German state?

Or is the rise of the far-left "Linke" (Left party) in western Germany to the brink of its first role as a coalition partner in a state government with the centre-left Social Democrats (SPD) simply a political fact-of-life now so many years after the Wall fell and the two Germanys were reunited?

‘Dinnergate’ perks up German campaign

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The German election campaign has so far lacked the riveting debates and explosive issues to which voters were treated in previous battles for power, perhaps because Chancellor Angela Merkel and her rival, Vice-Chancellor Frank-Walter Steinmeier, have worked together in the same “grand coalition” government for the past four years and neither party seems especially eager to rock the boat.

Filling the void have been several somewhat bizarre little scandals that each side has tried to use to tarnish the other, taking pot shots without resorting to full firepower. They are, after all, partners in power.

Merkel softens up and talks baking, makeup and clothes

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Between running an election campaign and trying to save European carmaker Opel at the weekend, German Chancellor Angela Merkel was baking a currant cake and writing out a shopping list for her husband.

Merkel has sought in recent months to soften her business-like image by opening up about her life at home, hoping to reach out to more voters ahead of the federal election on September 27.

Obama calls German election but Merkel knows he’s got it wrong

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Barack Obama might have unrivalled expertise about the U.S. electorate. But the American president showed he’s something of a fish out of water when it comes to the complex world of German politics — where the seeming winners sometimes end up losing and the losers can end up in power with the right alliance.

Obama recently told Germany’s conservative Chancellor Angela Merkel to stop worrying about the Sept. 27 election: “Ah, you’ve already won. I don’t know what you always worry about,” Obama told her in comments captured by a German TV camera at the White House as the two were on their way to a joint news conference.

How far would Obama have made it in Germany?

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What would have happened to Barack Obama if he had been born in Germany?

I had the chance to pose that question to a charismatic young German political leader who is sometimes likened by his supporters to the American President.

Greens party co-chairman Cem Oezdemir, the son of Turkish immigrants, became the first person from an ethnic minority elected to lead a major German party last year — a slogan at the time was “Yes, we Cem“. What might sound rather unspectacular in many industrial countries was actually an epic change in Germany, which until only a decade ago was loath to even acknowledge it was a country of “immigrants” (preferring to call its 7 million foreigners “guest workers”).

Stolen limo a nightmare for Merkel challenger Steinmeier

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Having your car worth 93,000 euros ($132,000) stolen while you’re on holiday in Spain is bad enough.

But if you’re a German government minister whose party is already facing an uphill battle just two months before a federal election, it’s even worse.

Arrivederci Angela! Merkel stops campaign for summer holiday

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Just imagine the outcry if Democrat Barack Obama and Republican John McCain had suddenly gone off on their own separate two-week vacations to, say, Mexico, just two months before the November election? Irresponsible! Reckless! Shirkers! Those and as well as other unprintable terms might be among the comments hurled their way.

Yet as unfathomable as it may be for candidates in the United States or many other countries to take a long holiday break so close to an election, in Germany it is just as inconceivable for politicians to continue to campaign actively during the summer holiday season — even if the election is just around the corner. Begging for votes while their countrymen are relaxing on the beach is simply verboten for Germans.

Merkel man jumps ship

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The man who has been so eloquently selling Chancellor Angela Merkel and her policies to the German public as a government spokesman for the last 3 years, 9 months and two weeks has been furloughed.

But Thomas Steg’s voluntary departure in Berlin just 2 months and 2 weeks before the federal election has raised more than a few eyebrows — he is not leaving his post as deputy government spokesman to go off and write a book or study horticulture but rather he will be leading the election campaign communications efforts of the man who wants to knock Merkel out of office — SPD candidate Frank-Walter Steinmeier.

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